Question:-
The’ demand for a product in the month of March turned out to be 20 units against an earlier made forecast of 20 units. The actual demand for April and May turned to be 25 and 26 units respectively. What will be the for cast for the month of June, using exponential smoothing method and taking smoothing constant a as 0.2?
Option (A)
20 units
Option (B)
22 units
Option(C)
26 units
Option(D)
28 units
Correct Option:
(B)
Question Solution:
FApril = ayMarch + (1-a)FMarch
= (0.2)(20) + (1-0.2)(20)= 20
FMay = aYApril + (1-a)FApril
= (0.2)(25) + (1-0.2)(20)
= 5 + 16 = 21
FJune = aYMay + (1-a)FMay
= (0.2)(26) + (1-0.2)(21)
= 5.2 + 16.8 = 22
question-answer-faq-8823